Toho Co., Ltd. Just Beat Revenue Estimates By 6.4%

The half-year results for Toho Co., Ltd. (TSE:9602) were released last week, making it a good time to revisit its performance. Results overall were respectable, with statutory earnings of JP¥260 per share roughly in line with what the analysts had forecast. Revenues of JP¥164b came in 6.4% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Toho

After the latest results, the consensus from Toho's eight analysts is for revenues of JP¥291.7b in 2025, which would reflect a discernible 5.1% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to plunge 20% to JP¥236 in the same period. Before this earnings report, the analysts had been forecasting revenues of JP¥291.3b and earnings per share (EPS) of JP¥242 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥6,485, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Toho, with the most bullish analyst valuing it at JP¥7,300 and the most bearish at JP¥5,900 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Toho's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 10.0% annualised decline to the end of 2025. That is a notable change from historical growth of 4.8% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Toho is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Toho. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Toho. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Toho going out to 2027, and you can see them free on our platform here..

You can also see our analysis of Toho's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.